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The shadow banking industry has grown to about $67 trillion, $6 trillion bigger than previously thought, leading global regulators to seek more oversight of financial transactions that fall outside traditional oversight.
The size of the shadow banking system, which includes the activities of money market funds, monoline insurers and off- balance sheet investment vehicles, “can create systemic risks” and “amplify market reactions when market liquidity is scarce,” the Financial Stability Board s
Supervisors consider shadow banking activities to be those that allow banks to carry out business off balance sheets, as well as those which allow investors to bypass lenders and the functions they traditionally fulfill on the markets.
“As a result of this audit,we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world. This is a clear case of socialism for the rich and rugged,you’re-on-your-own individualism for everyone else.”
The US needs to re-install the Glass Stegall act and truly nationalize the Fed. Especially since we know 16 trillion dollars of Fed money is part of this shadow banking system "lent" to their banking corporate cronies.
The shadow banking system is the collection of non-bank financial intermediaries that provide services similar to traditional commercial banks. It includes entities such as hedge funds, money market funds and structured investment vehicles (SIV). Investment banks may conduct much of their business in the shadow banking system (SBS), but most are not generally classed as SBS institutions themselves
Current functions of the Federal Reserve System include:
To address the problem of banking panics To serve as the central bank for the United States
To strike a balance between private interests of banks and the centralized responsibility of government
To supervise and regulate banking institutions
To protect the credit rights of consumers
To manage the nation's money supply through monetary policy to achieve the sometimes-conflicting goals of maximum employment stable prices, including prevention of either inflation or deflation moderate long-term interest rates
To maintain the stability of the financial system and contain systemic risk in financial markets
To provide financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system
To facilitate the exchange of payments among regions
To respond to local liquidity needs To strengthen U.S. standing in the world economy
Originally posted by DelMarvel
The reality is that most of the systemic problems that led to 2008 have not been addressed by our allegedly "Marxist" president or anyone else. The big players are even bigger and there remains the possibility of the same thing happening again.